New Delhi:

India on Friday said a “narrow view” should not be taken on the long-term agreement between New Delhi and Tehran on the Chabahar port project as it would benefit landlocked Afghanistan, Central Asia and the entire region.

The remarks by Ministry of External Affairs spokesperson Randhir Jaiswal came days after the United States warned of sanctions following India and Iran sealing the deal.

India and Iran on Monday signed a 10-year agreement that provided for Indian operations at the Chabahar port.

“India’s commitment towards the Chabahar port is to realise its potential as a connectivity hub for Afghanistan and Central Asian countries, which are landlocked,” Mr Jaiswal said at his weekly media briefing.

He said an Indian company — India Ports Global Limited — has been operating the port since 2018 on an interim lease.

“Now, we have concluded a long-term agreement which is essential for port operations,” Mr Jaiswal said.

“Since then, we have provided humanitarian assistance, including 85,000 metric tons of wheat, 200 metric tons of pulses and 40,000 litres of pesticide Malathion, to Afghanistan through this port,” he said.

Located in the Sistan-Balochistan province on the energy-rich Iran’s southern coast, the Chabahar port is being developed by India and Iran to boost connectivity and trade ties.

“The US has shown an understanding of the importance of the Chabahar port operations for continued humanitarian supplies to Afghanistan and to provide Afghanistan with economic alternatives,” Mr Jaiswal said.

“I would like to reiterate what the EAM (External Affairs Minister S Jaishankar) had earlier said that we should not take a narrow view of this issue,” he said.

Two days ago, Mr Jaishankar said a narrow view should not be taken of the agreement between India and Iran to develop the Chabahar port as the project will benefit the entire region. Mr Jaiswal said the Chabahar port project will benefit the entire region, particularly landlocked Afghanistan and Central Asia.

“The US has, in the recent past, appreciated the larger relevance of the Chabahar project, particularly in the context of humanitarian supplies to Afghanistan,” he said.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

This week marked a new chapter in India’s 20 year old interest in a port in Iran- Chabahar. On a visit to Tehran, Shipping Minister Sarbananda Sonowal and his Iranian counterpart oversaw the signing of an agreement to develop the Shahid Beheshti terminal- one terminal in the warm water port just off Iran’s Sistan Baluchistan province.

Broadly, here are the terms of the agreement.

The Long term contract signed is for 10 years- earlier, the two sides had signed an MoU in 2016, part of a trilateral agreement with Afghanistan for the development of the port, but it could not be converted into a long term contract for a number of reasons- changes in the jt venture partners, the slow pace of Indian investment etc.

India has committed US $120 million, and a credit line of US $250 million to develop the terminal. This is a small amount compared to the other big projects in the region, but it’s a start.

Thus far the terminal has a modest operation, 6 harbour cranes, and other equipment worth $25 million- to handle about 8.5 million metric tonnes of cargo, mostly between India and Iran and India and Afghanistan, but the plan is for a 4-phase development of its capacity to 82 million tons per year and 32 jetties.

The Contract is between India Ports Global and Ports and Maritime Organisation of Iran. Earlier the joint venture was with the Aria Banader Iranian Port & Marine Services Company. The contract contains a clause to extend the lease of the port terminal to India after 10 years as well.

But here’s where trouble struck. In a US State department briefing, its spokesperson, when asked about the deal, raised the risk of potential sanctions. When asked if there would be an exemption for this, the spokesperson said no.

That “No” at the end is the most significant part of his statement. Why? Because in 2018, the US had introduced an amendment to its Iran Freedom and CounterProliferation Act (IFCA), allowing an exemption from very stringent sanctions on any company doing business in Iran –

1. For Humanitarian aid to Iran

2. For any assistance and support to Afghanistan (which is what Chabahar was designated as).

3. A temporary waiver of 6 months to India, China and other countries for the import of oil from Iran. While China continued its oil imports from Iran after the 6 months ran out, India bowed to the Trump administration’s pressure, and stopped all oil imports.

The US State department has not clarified its statement so far- but if it is changing policy, it may be for a number of reasons:

1. The US pulled out from Afghanistan in 2021, and no longer wishes to support Kabul under the Taliban regime.

2. The US wants to dissuade India from broadening Chabahar’s scope to the INSTC and trade with Russia – even with the exemptions, India has had to slow down investments in Chabahar, has found it hard to find suppliers and insurers for its shipments, and plans to build the Chabahar Railway line have been dropped.

3. The Biden administration is getting tougher on Iran, especially under fire from Trump in an election year, and is narrowing its exemptions for Chabahar as well.

On the other hand, many believe the US is unlikely to follow through on its threat, given its previous records on threatening sanctions.

1. In 2017, the US had threatened sanctions on Chabahar as well as India’s oil imports from Iran and Venezuela. On Chabahar it gave an exemption, but India pulled out of a number of oil investments and cancelled imports from Iran and Venezuela.

2. Prior to 2018, US had threatened India in 2012 to cancel Iranian oil imports, but New Delhi at the time had not agreed, no sanctions followed.

3. With Russia- the US threatened CAATSA sanctions over India’s purchase of the S-400 systems, but has not followed through, although its acted against China and Turkey.

The US has banned a handful of Indian companies in its sanctions regime, including one for selling dual use tech to Russia, but nothing like it has done with other countries including China- a testament to India’s importance.

Why Chabahar, Iran connectivity ties matter

1. Ties with Iran part of traditional diplomacy, alternative to Pakistan, access to central asia.

2. Chabahar and INSTC balance India’s west asia policy with I2U2 and IMEEC.

3. India is part of multilateral platforms with Iran: SCO and BRICS.

4. Backtracking on oil imports, other deals has cost India, Chabahar is now the lynchpin of ties

Worldview Take

With all the problems the US has this year, including Ukraine, Gaza, the Iran-Israel tussle, ties with China and others, it is hardly likely to open a new front with India over Chabahar. However, New Delhi must keep an eye on US Congress, which could take a tougher line, even after US elections, even as it moves to shore up flagging ties with Iran. Eventually, diplomacy is the art of letting others have your way, and not one of constant brinkmanship.

Script and Presentation: Suhasini Haidar

Production: Shibu Narayan and Ananyaa Desikan

Mumbai:

The signing of the Chabahar Port deal is a “landmark” in India-Iran economic relations and it offers various future investment opportunities, including the development of subsequent phases of the facility, a top Iranian diplomat said in a note.

These opportunities include development of the second phase of Shahid Beheshti Port as well as the third and fourth phases on BOT model, among others, Davoud Rezaei Eskandari, Acting Consul General of Iran in Mumbai, said in the note shared with Press Trust of India.

India on May 13 signed a 10-year contract to operate the strategic Iranian port of Chabahar that will help it expand trade with Central Asia.

The Chabahar Port on the Gulf of Oman – which New Delhi had proposed to develop way back in 2003 – will provide Indian goods a gateway to reach landlocked Afghanistan and Central Asia using a road and rail project called International North-South Transport Corridor, bypassing Pakistan.

The long-term agreement was signed by Indian Ports Global Limited (IPGL) and the Port & Maritime Organisation of Iran. It replaces an initial 2016 pact, which covered India’s operations at Shahid Beheshti Terminal in Chabahar Port and had been renewed on an annual basis.

“India and Iran are important trade partners. India has been among Iran’s five largest trade partners in recent years,” Mr Eskandari said.

“The signing of the 10-year contract for equipping and operating general cargo and container terminals at First Development Phase of Shahid Beheshti Port of Chabahar is a landmark in India-Iran economic relations,” he said.

As per the contract, India is committed to investing USD 120 million (through IPGL) for the necessary equipment and USD 250 million credit line for financing port development, taking the contract’s total value to USD 370 million, he said in the note.

Also, the deal brings investment opportunities in petrochemical and related industries as well as in the construction of LNG and LPG export terminals; besides development of mini refineries and petrochemical plants, as per his note.

Chabahar Port, located outside the Strait of Hormuz, is the region’s sole deep-water oceanic port, he said in the note adding that “it serves as India’s vital conduit for accessing landlocked nations like Afghanistan and Central Asian countries”.

Additionally, it offers an efficient and economical transit pathway for goods destined for Europe and serves as a pivotal stopover for vessels en route from India to the Persian Gulf and the Middle East, he noted.

At the same time, Chabahar Free Zone offers numerous benefits for foreign investors, including a 100 per cent ownership of companies by non-Iranian entities; waivers of custom duties, among others, he said.

Besides, there is exemption from customs duties for importing raw materials and industrial machinery and ore, flexible labour laws compared to mainland Iran, and enhanced banking services and easier foreign currency exchanges.

Petrochemical sector, mining, pharma, agriculture, automobile industries as well as infrastructure development, information and communication and tourism and hospitality are some of the areas that offer business opportunities in Iran, he said.
 

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

New Delhi:

Shortly after India signed a 10-year contract to operate Iran’s Chabahar port, the US has warned that its sanctions on Tehran remain in place and anyone considering business deals with them needs to be “aware of the potential risk”.

New Delhi yesterday signed the contract to operate Chabahar port to expand trade with Central Asia. The port on the Gulf of Oman will provide Indian goods a gateway to reach landlocked Afghanistan and Central Asia using a road and rail project called International North-South Transport Corridor. This route bypasses Pakistan. India had first proposed this plan back in 2003, but US sanctions on Iran over its suspected nuclear programme slowed down the port’s development.

Responding to a question on India’s pact with Iran, deputy spokesperson of US Department of State Vedant Patel told the media, “We’re aware of these reports that Iran and India have signed a deal concerning the Chabahar port. I will let the government of India speak to its own foreign policy goals vis-a-vis the Chabahar port as well as its own bilateral relationship with Iran. I will just say, as it relates to the United States, US sanctions on Iran remain in place and we will continue to enforce them.

He added that “anyone considering business deals with Iran, they need to be aware of the potential risk that they are opening themselves up to and the potential risk of sanctions”. When a reporter asked if there’s any exemption for this, Mr Patel responded, “No”.

What Is The Port Plan

A long-term agreement to develop the Chabahar port was signed by Indian Ports Global Limited and the Port and Maritime Organisation of Iran, an official statement has said. IPGL will invest about $120 million and another $250 million will be raised as debt.

The ceremony for the signing of the pact was signed was attended by Sarbananda Sonowal, Union Minister for Ports, Shipping and Waterways, and Iran’s Transport and Urban Development Minister Mehrdad Bazrpash in Tehran.

The new pact replaces a 2016 agreement, which covered India’s operations at Shahid Beheshti terminal in Chabahar port and was renewed annually.

This is the first time India takes over the management of an overseas port that is expected to boost exponentially trade among India, Iran and Afghanistan.

The Ministry of External Affairs has allocated Rs 100 crore for the Chabahar Port for 2024-25.

“This 10 years long term lease agreement further strengthens the bilateral ties between the two countries while bolstering confidence and boosting trust of trading communities from the region,” the statement added.

“With the signature of this contract, we have laid the foundations of India’s long-term involvement at Chabahar,” Union Minister Sonowal said on the occasion.

The Chabahar port is being projected as a key hub for the International North-South Transport Corridor project — a 7,200-km-long multimode transport project for moving freight between India, Iran, Afghanistan, Armenia, Azerbaijan, Russia, Central Asia and Europe.

Discussions on developing Chabahar Port were first held in 2003 during then Iranian President Muhammad Khatami’s visit to India. In 2013, India committed to investing $100 million towards its development. A Memorandum of Understanding to develop the port was signed in May 2015. The contract was executed in 2016 during Prime Minister Narendra Modi’s trip to Iran.

The Kandla port in Gujarat is the closest to Chabahar port at 550 Nautical Miles. The distance between Chabahar and Mumbai is 786 Nautical Miles.

International Port of Shahid Beheshti in Chabahar.
| Photo Credit: Getty Images

Any country having business dealings with Iran runs the risk of sanctions, the United States has said, noting that it is aware that Iran and India have signed a deal concerning the Chabahar port.

Responding to the India-Iran Chabahar agreement, “We are aware of these reports that Iran and India have signed a deal concerning the Chabahar port. I will just say, as it relates to the United States, U.S. sanctions on Iran remain in place and we’ll continue to enforce them,” State Department Deputy Spokesperson Vedant Patel told reporters at his daily news conference.

When asked whether there was a sanctions exemption “specifically” for the new agreement, the Spokesperson said “no”. “Any entity, anyone considering business deals with Iran needs to be aware of the potential risk they are opening themselves up to and the potential risk of sanctions,” Mr. Patel added.

Over the last months, the U.S. has imposed sanctions to counter Iran’s activities, taking aim at its drone and missile programs, as well as its financing of groups like Hamas.

India and Iran on May 13 signed a 10-year contract, according to which India Ports Global Ltd. (IPGL) will invest about $120 million to equip and develop the Chabahar port terminal that India has been working on thus far as a means to build a trade corridor via Iran to Afghanistan, Central Asia and on to Russia. 

Chabahar agreement can be driver of Iran-India relations: Ambassador Iraj Elahi

A memorandum of understanding for the development of the Chabahar port by India was signed in May 2015. The contract was executed on May 23, 2016, during the visit of Prime Minister Narendra Modi to Iran.

Chabahar is a deep water port located in the Sistan-Baluchistan province of Iran. During the visit of Mr. Modi to Iran in May 2016, a trilateral agreement to establish the International Transport and Transit Corridor (Chabahar Agreement) was signed by India, Iran, and Afghanistan.

Washington:

Any country having business dealings with Iran runs the risk of sanctions, the United States has said, noting that it is aware that Iran and India have signed a deal concerning the Chabahar port.

“We’re aware of these reports that Iran and India have signed a deal concerning the Chabahar port. I will let the government of India speak to its own foreign policy goals vis-a-vis the Chabahar port as well as its own bilateral relationship with Iran,” State Department Deputy Spokesperson Vedant Patel told reporters at his daily news conference.

“I will just say, as it relates to the United States, US sanctions on Iran remain in place and we’ll continue to enforce them,” he said in response to a question on India’s deal with Iran on the strategic Chabahar port.

“You’ve heard us say this in a number of instances, that any entity, anyone considering business deals with Iran, they need to be aware of the potential risk that they are opening themselves up to and the potential risk of sanctions,” Patel said.

India and Iran on Monday signed a 10-year contract for the operation of a terminal at the strategically important Chabahar port in Iran, a move that will boost regional connectivity as well as trade ties.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

New Delhi:

India and Iran on Monday signed a 10-year contract for the operation of a terminal at the strategically important Chabahar port in Iran, a move that will boost regional connectivity as well as trade ties.

This is the first time India will take over the management of an overseas port that will also have a multiplier effect on trade among India, Iran and Afghanistan as efforts continue to directly tap the potential in Central Asia, bypassing neighbouring Pakistan.

According to an official statement, the contract was signed by India Ports Global Ltd (IPGL) and Iran’s Port & Maritime Organisation (PMO), in the presence of Ports, Shipping and Waterways Minister Sarbananda Sonowal.

“The long-term bilateral contract on Chabahar Port Operation was signed between Indian Ports Global Limited (IPGL) of India and the Port & Maritime Organisation (PMO) of Iran, enabling operation of Shahid-Beheshti in Chabahar Port Development Project for a period of 10 years,” the statement said.

At Tehran, Iran today, delighted to be part of the signing of the Long Term Bilateral Contract on Chabahar Port Operations in presence of HE Mehrdad Bazrpash, Minister of Roads & Urban Development, Iran.

India will develop and operate Iran’s strategic Chabahar Port for 10… pic.twitter.com/iXwekIk8ey

— Sarbananda Sonowal (Modi Ka Parivar) (@sarbanandsonwal) May 13, 2024

This is the first time India will take over the management of an overseas port. “This agreement aims to enhance regional connectivity and facilitate trade, particularly between India, Iran and Afghanistan,” the statement said.

The India Ports Global Chabahar Free Zone (IPGCFZ), a subsidiary of IPGL, facilitated the first consignment of exports from Afghanistan to India in 2019.

The statement said the operations continued through short-term contracts while negotiations on the long-term agreement picked pace with the visit of Mr Sonowal to Chabahar in August 2022.

“This 10 years long-term lease agreement further strengthens the bilateral ties between the two countries while bolstering confidence and boosting trust of trading communities from the region,” the statement said.

As part of the agreement, the statement said India will procure MHCs, RMQCs, RTGCs, Reach Stackers, Forklifts, Pneumatic Unloaders etc at Chabahar Port. “The agreement paves the way for enhanced trade and investment opportunities which will potentially boost India’s economic development,” it added.

Speaking at the occasion, Mr Sonowal said, “With the signature of this contract, we have laid the foundations of India’s long-term involvement at Chabahar.”

Mr Sonowal added that the signing of this contract will have a multiplier effect on the viability and visibility of Chabahar port.

According to him, Chabahar is not only the closest Iranian port to India but it is also an excellent port from a nautical point of view.

Mr Sonowal also held a meeting with Iranian Minister of Roads & Urban Development Mehrdad Bazrpash.

Located in Sistan-Balochistan province on the energy-rich Iran’s southern coast, the Chabahar port is being developed by India and Iran to boost connectivity and trade ties.

India has been pushing for the Chabahar port project to boost regional trade, especially for its connectivity to Afghanistan.

India and Iran have projected the port as a key hub for the INSTC project. The INSTC is a 7,200-km-long multi-mode transport project for moving freight among India, Iran, Afghanistan, Armenia, Azerbaijan, Russia, Central Asia and Europe.

India has been developing a part of Chabahar Port and discussions on the development of the port dates back to 2003 during Iranian President Muhammad Khatami’s visit to India.

In 2013, India committed to investing USD 100 million towards the development of Chabahar Port.

Earlier, a memorandum of understanding (MoU) for development of Chabahar Port by India was signed in May 2015. Thereafter, the contract was executed on May 23, 2016, at Tehran (Iran) during the visit of Prime Minister Narendra Modi to Iran.

Chabahar is an oceanic port. By leveraging Chabahar Port, India aims to bypass Pakistan and establish direct access to Afghanistan and beyond, into Central Asia. Kandla port in Gujarat is the closest to the Chabahar port at 550 Nautical Miles while the distance between Chabahar and Mumbai is 786 Nautical Miles.

Since 2019, it has handled container traffic of more than 80,000 TEUs and bulk and general cargo of more than 8 million tonnes.

The Ministry of External Affairs (MEA) had allocated Rs 100 crore for Chabahar Port for 2024-25, underlining India’s focus on connectivity projects with Iran. 

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)